Polen Capital, an investment management company, released its “Polen U.S. Small Company Growth Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The third quarter had a strong finish for U.S. small-cap equities, driven by interest rate reductions and fading recessionary concerns. In the third quarter, the fund delivered 7.65% gross, and 7.35% net of fees compared to an 8.41% return for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Polen U.S. Small Company Growth Strategy highlighted stocks like RH (NYSE:RH) in the third quarter 2024 investor letter. Headquartered in Corte Madera, California, RH (NYSE:RH) is a retailer in the home furnishings market. The one-month return of RH (NYSE:RH) was -8.99%, and its shares gained 17.61% of their value over the last 52 weeks. On November 15, 2024, RH (NYSE:RH) stock closed at $315.70 per share with a market capitalization of $5.835 billion.
Polen U.S. Small Company Growth Strategy stated the following regarding RH (NYSE:RH) in its Q3 2024 investor letter:
“We exited four positions during the quarter, including SiTime, AppFolio, RH (NYSE:RH), Doximity, and Alight. We sold our position in furniture retailer RH due to our concerns over the company’s higher-than-average leverage in an uncertain economic environment. We also see the long-term growth outlook as less clear as the U.S. market matures and international expansion is nascent. We do not believe the valuation reflected this risk and envisioned opportunities for better returns elsewhere.”
A customer happily browsing aisles of high-end furniture in a large showroom.
RH (NYSE:RH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held RH (NYSE:RH) at the end of the second quarter which was 45 in the previous quarter. While we acknowledge the potential of RH (NYSE:RH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed RH (NYSE:RH) and shared the list of hot stocks to consider from Jim Cramer’s Ultimate Stock Picks. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.